Retailers Seeking Salvation
In some ways, it's all about confidence - consumer confidence, that is. And in others, it's about nerves of steel - retailer nerves, that is. Finding the best way to keep stores open and customers spending is never an easy task but is so difficult at the moment that some in the industry are seeking outside assistance from government.
Sir Stuart Rose, executive chairman of Marks & Spencer and a member of UK Prime Minister Gordon Brown's Business Council of corporate leaders, has suggested that retailers be given "the same level of financial help" as banks and car companies, according to The Daily Telegraph.
Bearing in mind the number of people employed by - and losing their jobs in - the retail industry, Sir Stuart maintains that support packages should not be confined to the manufacturing sector. "There are potentially going to be some problems with liquidity and refinancing [among retailers], and what is going to happen this year when what I call a proper company gets into trouble? Is the same sort of help going to be offered to these businesses? I don't know. Time will tell," he said.
Elsewhere in Europe, just-food reports that food manufacturers supplying retail chains in Slovakia will be protected by new laws against "unfair conditions in contracts."
In the U.S., back in December, the National Retail Federation wrote to President Obama to request a series of sales tax holidays. Response here on RetailWire was less than enthusiastic and there is no sign yet that the President disagrees with their views or has any other immediate plans to prioritize retailers' quite genuine problems.
The big advantage food manufacturers and retailers will always have is that people will always have to eat. They don't always have to lease or buy cars. The real battle may be with the competition, not the consumer, begging questions of whether and how governments can really bail out retailers.
Discussion questions: Are retailers as deserving of government bailout funds as car and financial companies?